The Most Popular Twitch creators seem to be living lavish Hollywood lifestyles with 6-figure a month checks. For the past couple of years, live streaming has grown into a popular style of social media.
However, the glitz and glamorous lifestyle led by these online personalities may be even more unreachable than they already seem, as creator profits are set to go down.
In the beginning of 2024, Twitch’s CEO claimed the company was in a financial crisis.
Twitch’s most popular streamers have negotiated lucrative deals.
Twitch allows top users to keep high percentages of subscription profits, and popular personalities on the platform have signed multi-figure branding deals.
In addition, Twitch offers multiple sources of income as the ad revenue system allows creators to collect revenue based on subscriptions, in-app purchases, and the number of ads watched by their audience.
All That Is About To Change
Twitch broke records in terms of viewers and subscriptions in 2024, but the company that has been non-profitable for 14 years has recently seen a decrease in revenue.
Twitch broke subscription and viewership records in 2024, and they also implemented more ads on the platform, but multiple analytics sites expect the company to have had less financial returns in 2024 than in 2023, when Twitch’s record revenue still did not show a financial profit.
Essentially, in 2024, Twitch generated billions of dollars, gained subscribers at a rapid rate, and increased ad revenue on its content. Yet, it was still projected to be unable to make a profit.
Why?
Businesses are only profitable when the amount of money they make (the revenue) is more than the amount of money they spend (the expenses).
When Twitch reported in early 2024 that it had not been profitable, it did not release its entire budget; however, we can conclude that its expenses for the year were in the multi-billions.
Twitch’s CEO admits that in 2023 alone, Twitch paid over 1 billion dollars in creator payouts.
As a result of Twitch’s failure to make a profit, workers have been laid off, ads have increased, and opportunities for users to make streaming their income are getting smaller.
All these things have the potential to be hurtful to the consumer experience and economically stressful for creators on the site.
Twitch, like other struggling online media platforms, announced plans in 2024 to reduce creator payouts by 28%.
Twitch plans to take away the 70/30 pay out model, where creators receive 70% of the total revenue in subscriptions each month; to a 50/50 payout model where creators receive only 50% of the money made from their monthly subscriptions.
For example, a user making 70,000$ a month would have their monthly salary decreased to 50,000$ a month, for an overall decrease of 240,000$ dollars a year before taxes.
In addition, Twitch’s ad revenue program, which allows users to profit directly from the ads their viewers watch, has reportedly dropped in value by up to 95% for some users in 2025.
And that is not all
Twitch is currently owned by Amazon, which may have the marketing network and profit margins to support the streaming business while it struggles to find a profitable business model.
However, recent last year firing of about 35% of the Twitch staff, the closing of Twitch’s operations in South Korea, and the Twitch CEO recently indicating the company will be giving less creator investment in the years to come suggest serious changes are looming.
Twitch often finds itself embroiled in controversy. In the past two years, live streamers have caused media storms, crashing cars, committing crimes, partying, and engaging in risky behaviors on their streams.
Twitch’s audience is primarily male teens and young adults, which could give Twitch a special marketing advantage for male-focused businesses.
These demographics could also be a huge downfall for Twitch if upcoming government regulations on social media succeed in preventing and/or deterring young people’s ability to create accounts on the Twitch platform and others.
Though these regulations may not affect current Twitch users, they will restrict Twitch’s ability to capitalize on its influence and popularity with young children in the future.
Potentially stunting a market that has already struggled to gain traction and reach profitable standings.
Something News Network 